Sep201106

Fear of Europe is apparently back in full effect. The European economy is not healthy and investors, traders, analysts, etc… Are making it very clear that you should be divested of Europe. Even some of the experts that I respect and value are saying that you should not invest in Europe or European companies. If enough people listen to them (and they often do), that means that many European stocks will drop this week.

The decreasing stock prices of many European companies will be warranted because the negative economic news from Europe is not just pretend. However, whenever there is a mass sell-off it often tends to be over done. This means that there will be good value out there in some stocks. Even though the European economy is not doing well and many of its companies are ill as well, clearly other European firms are healthy and growing. If you do your homework to find out which European firms are on solid footing and set for growth you can find some real steals out there this week. Too many people will be afraid to buy any European stocks and this is exactly why I would be looking to do just that.

I won’t pick stocks, but I will give you one simple thing to look for. I would look at companies that are global, or at least have a meaningful part of their revenues coming from outside of Europe. Europe seems to be heading towards a period of very slow growth (if at all), but European companies that derive a good portion of their sales from outside the home continent may not feel it that much.

This shortened week will be turbulent for Europe. Many investors will be selling off anything Europe. This may present an opportunity to buy some gems at low prices and put you in a position to make some real money when the story turns a corner.